On September 12, 2025, the Standing Committee of the National People's Congress adopted a comprehensive revision of China's Arbitration Law. Marking the first major legislative overhaul since the original law took effect in 1995, the updated statute comprises 96 articles across eight chapters and entered into force on March 1, 2026. Key updates align the Chinese legal framework more closely with the UNCITRAL Model Law on International Commercial Arbitration, featuring enhanced rules for foreign-related disputes and strengthened judicial support.
The revised law explicitly reflects a pro-arbitration judicial stance, aiming to uphold the validity of arbitration agreements wherever possible. It officially codifies the doctrine of severability, clarifying that the non-formation of a broader contract does not invalidate the underlying arbitration agreement. Furthermore, if one party asserts the existence of an agreement and the opposing party fails to contest it before the first hearing, the tribunal will deem the agreement valid. This legislative backing mirrors recent judicial practice; as Justice GAO Xiaoli Gao Xiaoli, Vice President of the Supreme People's Court, indicated, out of 5,475 related cases handled by Chinese courts in 2024, only 10.3 percent resulted in agreements being ruled invalid or non-existent.
In a significant procedural shift, the updated law introduces an ad hoc arbitration framework. Parties involved in foreign-related maritime disputes, or commercial disputes involving enterprises in designated free trade zones (FTZs) and free trade ports (FTPs), may now select China as their seat of arbitration for ad hoc tribunals. The revision also strengthens interim measures by formally introducing provisions for behavioral preservation (preservation of conduct), which functions as a form of injunctive relief. Additionally, it explicitly empowers tribunals to request judicial assistance for evidence collection. Highlighting strong court backing, Chinese courts granted 99 percent of arbitration-related preservation requests in 2024.
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To further attract international dispute resolution, the law permits overseas arbitration institutions to establish operational offices within FTZs and FTPs. It also officially introduces the concept of the "seat of arbitration" to determine applicable laws for arbitration procedure and competent court jurisdiction.
Finally, the law expands the jurisdictional nexus points required for the recognition and enforcement of foreign arbitral awards. Underscoring an arbitration-friendly environment, Chinese courts granted all 42 applications for the recognition and enforcement of foreign arbitral awards in 2024.
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Contributors: CJO Staff Contributors Team
